p 


Duke  University  Libraries 


D03212478R 


MESSAGE  OF  THE  PRESIDENT. 


Executive  Office,      ^ 
Richmond,  Va.,  September  SO.  1862.  S 

To  the  Senate  and  House  of  Representatives  : 

I  herewith  transmit  a  communication  from  the  Postmaster  General, 
to  which  I  respectfully  call  your  attention : 

The  seventh  clause  of  the  eighth  section  of  the  Constitution  directs 
that  after  the  first  of  March.  1863,  the  expenses  of  the  postal  service 
shall  be  paid  out  of  its  revenues. 

The  interruption  of  commerce  and  communication,  resulting  from 
the  war  and  the  occupation  of  a  portion  of  our  territory  by  the  enemy, 
have  necessarily  curtailed,  to  a  considerable  extent,  the  revenues  of 
the  Department,  and  rendered  it  impossible  while  the  war  continues 
and  these  causes  exist,  to  make  its  revenues  cover  its  expenses  with- 
out such  a  reduction  of  the  service  as  would  seriously  aft'ect  the 
interests  of  the  people  of  the  Confederate  States. 

If,  in  your  opinion,  the  clause  of  the  Constitution  above  referred 
to.  merely  directs  that  Congress  shall  pass  such  laws  as  may  be  best 
calculated  to  make  the  postal  service  self-sustaining,  and  does  not 
prohibit  the  appropiation  of  money  to  meet  deficiencies,  the  question 
is  one  of  easy  solution.  I3ut  if,  on  the  contrary,  you  should  consider 
that  the  constitutional  provision  is  a  positive  and  unqualified  prohi- 
bition against  any  approrpiation  from  the  treasury  to  aid  the  opera- 
tions of  the  Postoffice  Department,  it  is  for  you  to  determine  whether 
the  difficulty  can  be  overcome  by  a  further  increase  of  the  rates  of 
postage  or  by  other  constitutional  means. 

Doubtful  as  to  the  true  intent  of  the  Constitution,  I  submit  the 
question  to  the  Congress,  and  ask  for  it  the  deliberation  which  its 
importance  may  claim. 

JEFFERSON  DAVIS. 


Digitized  by  the  Internet  Archive 
in  2011  with  funding  from 
Duke  University  Libraries 


http://www.archive.org/details/reportofpostmast09conf 


REPORT 


OK    TIIK 


POSTM  A  STER    GENERA  L. 


Postoffice  Department,  ) 
Richmond,  September  29,  1862.       ] 

Sir  :  In  view  of  the  approaching  adjournment  of  Congress,  and  of 
the  probability  that  the  expenses  of  the  Postoffice  department  cannot 
be  paid  out  of  its  own  revenues  after  the  first  day  of  March  next,  as 
required  by  the  seventh  clause  of  the  eighth  section  of  the  first  arti- 
cle of  the  constitution,  without  so  great  a  reduction  of  postal  facili- 
ties as  to  seriously  embarrass  the  correspondence  of  the  country  and 
deprive  p  >rtions  of  it  of  the  benefit  of  the  mails,  it  becomes  neces- 
sary for  me  to  call  your  attention  to  the  suggestions  on  this  subject 
submitted  in  my  report  at  che  opening  of  the  present  session  of  Con- 
gress.    In  that  report  I  submitted  the  following  statement : 

"  Proposals  for  new  service  were  received  from  the  States  of  Mis- 
sissippi. Alabama.  Tennessee,  [Louisiana.  Arkansas  and  Texas,] 
for  the  contract  term  of  four  >ears  ;  and  it  is  found  that  the  cost  of 
the  service  in  all  these  States  has  been  greatly  increased  by  the 
causes  suggested  in  my  last  report  as  likely  to  produce  such  a  result. 

"The  act  approved  April  19th,  1862,  establishing  a  uniform  rate 
of  postage  of  ten  cents  on  single  letters,  and  the  act  approved  April 
21st,  reducing  the  amount  of  commissions  allowed  to  postmasters, 
have  not  been  in  operation  long  enough  to  enable  me  to  determine 
their  effect  upon  the  revenues  of  the  department. 

"  The  receipts  and  expenditures  of  the   Postofiice  department,  for 
the  three  quarters  for  which  the   accounts  have  been  made  up  in  the 
Auditor's  office,  and  for  the  fractional  part  of  a  quarter  embracing  the 
month  of  June,  1861.  are  as  follows: 
"  For   the    quarter  which  ended   September  30th, 

1861,  embracing  the  preceding  month  of  June, 

the  expenditurees  were  $668,727  34 

Receipts,  414,163  64 


Excess  of  expenditures,  $254,563  70 


"For    the    quarter   which    ended    December  31st, 

1861,  the  expenditures  were  $721,430  29 

Receipts,  191,163  64 


Excess  of  expenditures,  $230,266  65 

"  For  the  quarter  which  ended  March  ;J  1  >-t .  1862 

the  expenditures  were  $674,21 

Receipts,  418,802   o2 


Excess  of  expenditures,  $255,416  25 
"  The  aggregate  expenditures  for  the  ten  month? 

which  ended  31st  March,  1862,  were  $2,064,376  tti 

Aggregate  receipts,  1,324,121  90 


Aggregate  excess  expenditures,  $740,254  50 

"  It  is  to  be  borne  in  mind,  that  the  expenditures  as  shown  above, 
were  incurred  under  the  contracts  made  with  the  government  of  the 
United  States,  and  before  the  reductions  of  the  cost  of  service  by  the 
reduction  and  discontinuance  of  service  by  this  department  had  gone 
into  operation.  The  reductions  of  the  cost  of  the  service  by  the 
various  means  set  forth  in  my  last  report,  will  probably  show  a  con- 
siderable decrease  of  expenditure  for  the  quarter  which  ended  June 
33th,  1862.  And  both  the  receipts  and  expenditures  of  the  depart- 
ment will  be  materially  reduced  for  that  and  the  succeeding  quarters, 
by  the  occupation  of  parts  of  our  territory  by  the  enemy  and  the 
interruption  of  our  postal  communication  across  the  Mississippi  river. 
The  increased  cost  of  the  service  under  the  new  contracts  referred  to 
in  a  previous  part  of  this  report,  will  tend  to  prevent  the  department 
from  becoming  self-supporting  by  the  time  prescribed  by  the  constitu- 
tion. It  remains  to  be  seen  whether  the  increase  of  the  rates  of  pos- 
tage, the  reduction  of  the  commresions  heretofore  paid  to  postmasters 
and  the  reduction  of  the  cost  of  service  by  the  various  means  men- 
tioned in  my  last  report,  will  furnish  a  revenue  equal  to  the  current 
expenditures  of  the  department.  That  it  would  have  done  so,  if  we 
could  have  held  all  our  territory  free  from  the  occupation  of  the 
enemy,  I  have  little  doubt.  If  the  measures  already  adopted  by  Con- 
gress and  by  this  department,  fail  to  make  its  revenues  equal  to  its 
expenditures  by  the  time  prescribed  by  the  constitution,  a  still  further 
reduction  of  the  cost  of  the  service,  and  consequently  of  postal 
facilities,  must  necessarily  follow — unless  it  be  deemed  advisable  by 
Congress  to  make  a  still  greater  increase  of  the  rates  of  postage. 
And  this  latter  alternative  would  be  of  doubtful  policy,  unless 
rendered  expedient  by  the  increased  amount  of  currency  in  circula- 
tion, and  the  consequent  enhancement  of  the  cost  of  the  service,  as  of 
everything  else.  It  may  be  doubtful,  even  in  view  of  such  a  condi- 
tion of  things  whether  the  revenues  of  the  department  would  be  in- 
creased by  an  increase  of  the  rates  of  postage. 

"  To  show  the  difference  between  the  receipts  and   expenditures  of 
the  postal  service  for  the  first  ten  months  under  the  government  of 


the  Confederate  States,  and  for  a  like  period  of  time   under  the  gov- 
ernment of  the  United  States,  the  following  figures  are  presented: 

"  The  expenditures  under  the   government  of  the  United  States  for 
the  ten  months  which  ended  June  30th.  1861',  were      $3,580,205  66 
"  Expenditures  under  the  government  of  the  Con- 
federate States  for  the  ten  months  which  ended 
March  31st,  1862,  were  2,064,376   40 


Showing  a  reduction  in  the  cost  of  the  service  for 

that  period,  of  §1, 515, 829  26 
"  The  receipts  for  ihat  period  under  the  government 

of  the  United  States,  were  1,264,200  47 
Receipts  for  the  same  period  under  the  government 

of  the  Confederte  States,  1.324,121   90 

>  

Showing  an  increase  of  receipts  under  the  Confed- 
erate Government,  of  §59,921   43 
"  From  this  it  will  be  seen    that   the  cost    of  the    service  has  been 
greatly  reduced,  and  that  there  has  been  a  small  increase  of  ihe  reve- 
nues of  the  department." 

The  above  statement  gives  the  receipts  and  expenditures,  as  far  as 
shown  by  the  books  of  the  Auditor's  office.  The  accounts  for  the 
quarter  which  ended  June  3d,  will  not  be  made  up  in  the  current 
course  of  business,  until  the  twentieth  of  next  month;  and  here  the 
department  has  no  reliable  information  as  to  the  receipts  and  expen- 
ditures for  the  last  five  months,  to  aid  in  forming  an  estimate  of  future 
receipts  and  expenditures. 

In  my  regular  annual  report,  submitted  ou  the  twenty-eighth  of 
February  last,  after  stating  the  measures  which  had  been  adopted  by 
Congress  and  by  this  department,  with  a  view  to  reduce  its  expendi- 
tures, and  increase  its  receipts,  so  as  to  meet  the  requirement  of  the 
constitution,  that  its  expense  should  be  paid  out  of  its  own  revenues 
after  the  first  of  March  next,  I  added  :  "  But  this  may,  in  a  greater 
or  less  degree,  be  counteracted  by  a  reduction  of  competition  in  bids 
for  the  new  service  on  account  of  the  large  number  of  our  citizens 
who  are  in  the  army.  And  if  it  shall  be  found  that  the  price  of  ani- 
mals, and  vehicles,  and  forage,  and  subsistence  is  increased  by  the 
existence  of  the  war,  that  will,  also,  increase  the  cost  of  the  new 
mail  service,  and,  to  that  extent,  counterbalance  the  anticipated  re- 
ductions of  the  cost  of  the  service.'' 

In  re-letting  contracts  for  the  transportation  of  the  mails  in  the 
States  of  Tennessee,  Alabama.  Mississippi,  Louisiana,  Arkansas  and 
Texas,  for  the  ensuing  four  years  from  the  first  of  July  last,  it  was 
found  that,  from  the  causes  above  suggested,  the  average  rate  of  the 
cost  of  transportation  was  greatly  increased.  In  some  cases  the  in- 
creased cost  was  as  much  as  one  hundred  per  cent,  over  the  prices  paid 
under  the  preceding  contracts,  and  generally  there  was  an  advance 
of  cost.  The  existing  contracts  for  the  other  States  of  the  Confed- 
eracy will  expire  on  the  thirtieth  of  June  next,  when  new  contracts 
must  be  made,  in  which  it   may  be   fairly    anticipated   that  a  like  in- 


■  ill  occur  in  them.     This   increase,  pre 

and  prospective,  of  the  cost  of  the  Bervice  will,  to  whatever  extent  it 
may  reach,  counterbalance  the  reductions   of    expenditure    resulting 

from  the  various  means  heretofore  adopted  with  a    view  to  render  the 
department  self-sustainh.    . 

1  quote  the  following  from  my  annual  report    of  the  twenty-eighth 
tary  last,  showing  the  measures  which  had  been  adopted  by  ; 
with  a  view  to  equalizing  the  receipts  and    expenditures  of  the 
:  tment : 

Lmong  the  means  adopted  by  I  is  to   enable   the  post" 

department  to  overcome  this  large  deficiency,  and  to  vender  the  de- 
partment self-sustaining,  was  the  abolition  of  the  franking  privilege; 
the  increase  of  the  rates  of  postage  on  all  descriptions  of  mailable 
matter  ;  the  prohibition  of  the  carrying  of  newspapers  and  other 
mailable  matter  over  the  post  routes  as  freight ;  the  providing  thai  all 
contracts  to  lie  made  for  carrying  the  mails  should  be  let  to  the  lo 
bidder,  without  reference  to  the  mode  of  conveyance  ;  the  clothing  of 
the  Postmaster  General  with  power  to  '  annul  contracts,  or  to  discon- 
tinue or  curtail  the  service  and  pay  on  them,  when  he  shall  deem  it 
advisable  to  dispense  with  the  service  in  whole  or  in  part,'  on  the 
conditions  specified  in  the  law  ;  and  the  reduction  of  the  rates  of 
compensation  to  railroad  companies."  To  which  may  be  added  the 
farther  increase  in  the  rates  of  postage  and  the  reduction  of  the  rates 
of  commissions  allowed  to  postmasters,  by  subsequent  legislation. 

The  following  extract  from  the  same  report  will  show  the  measures 
which  had  been  taken  by  this  department,  with  a  view  to  the  same 
end  : 

In  order  to  prepare  the  department  to  meet  the  requirement  of  the 
constitution,  that-  it  shall  be  made  self-sustaining  after  the  first  of 
March,  1863,  and  in  execution  of  the  laws,  and  to  carry  out  the  policy 
of  Congress  on  this  subject,  I  have  from  time  to  time  curtailed  the 
service  on  such  routes  as  would  admit  of  it.  and  wholly  discontinued 
it  on  others,  where  this  could  be  done  without  material  inconvenience 
to  the  public,  and  where  the  cost  of  the  service  was  grossly  dispropor- 
tionate to  the  receipts  from  postages.  I  have  also  discontinued  the 
service  of  such  route  and  local  agents  as  could  be  dispensed  with. 

<■  In  addition  to  the  reduction  of  the  cost  of  service  by  curtail- 
ments and  discontinuances,  above  referred  to,  the  performance  of 
service  has  been  prevented  on  a  number  of  steamboat  and  steamship 
routes  by  hostile  fleets  of  the  enemy." 

It  is  believed  the  reduction  of  the  expenditures  of  the  department 
by  the  above  means,  has  been  carried  as  far  as  it  can  be  without 
withholding  from  the  people  the  necessary  mail  facilities. 

Though  it  is  supposed  still  greater  reductions  of  the  cost  of  the 
service  will  appear  for  the  quarter  which  ended  the  30th  June  last,  and 
for  subset] iieut  quarters,  resulting  from  the  curtailment  and  discon- 
tinuance of  service,  the  effect  of  which  does  not  appear  in  the  accounts 
of  receipts  and  expenditures  rendered  before  that  time,  it  is  not  be- 
lieved these  measures  will  so  equalize  the  expenditures  and  receipts 
of  the  department  as  to  render  it  self-sustaining  by  the  time  pre- 


scribed  in  the  constitution.  It  becomes  necessary,  therefore,  to  con- 
sider how  this  difficulty  is  to  be  overcome.  If  it  is  to  be  done  by 
further  reductions  of  the  service,  portions  of  the  country  must  be 
deprived  of  postal  facilities,  and  the  usefulness  of  the  service  greatly 
impaired  in  others.  In  that  portion  of  my  last  report  quoted  above, 
a,  further  increase  of  the  rates  of  postage  is  suggested  as  another 
mode  of  meeting  the  difficulty,  and  a  doubt  expressed  as  to  whether 
such  increase  would  augment  the  revenues  of  the  department.  I  am 
not  prepared  to  change  the  qualified  manner  in  which  this  alternative 
was  then  presented.  I  only  recur  to  it  as  one  of  the  means  which 
may  receive  the  consideration  of  Congress. 

While  the  policy  established  by  the  provision  of  the  constitution 
requiring  the  expense  of  the  department  to  be  paid  out  of  its  own 
revenues,  is  believed  to  be  correct  in  principle,  the  incorporation  of 
such  a  provision  in  the  constitution  must  continue  to  present  embar- 
rassments in  the  administration  of  the  department  as  long  as  it  exists, 
from  the  fact  that  the  estimates  and  appropriations  for  the  support  of 
the  department  are  to  be  made  before  its  liabilities  and  revenues  have 
accrued,  and  before  the  amount  of  them  can  with  reasonable  certainty 
be  determined.  Under  the  most  favorable  circumstances,  and  under 
the  exercise  of  the  most  vise  foresight,  in  any  attempt  to  equalize  the 
receipts  and  expenditures  of  the  department,  the  receipts  might  be 
greater  than  the  expenditures  one  year  and  the  expenditures  greater 
than  the  receipts  another.  So  that  a  literal  compliance  with  this 
provision  of  the  constitution  cannot  be  made  in  any  other  way  than 
by  the  accumulation  and  preservation  of  a  surplus  of  receipts  large 
enough  to  cover  all  contingencies.  <• 

If  that  provision  of  the  constitution  can  be  met  by  an  arrangement 
to  endure  until  the  close  of  the  war  and  the  revival  of  commerce  and 
prosperity,  a  compliance  with  its  requirements  would  be  practicable 
after  that  time,  subject  to  the "  qualification  above  suggested.  Or,  if 
it  could  be  amended  so  as  to  suspend  its  operation  until  the  happening 
of  those  events,  the  anticipated  embarrassment  could  be  obviated. 
But  the  delays  which  must  necessarily  attend  such  a  change,  if 
desired  by  the  States,  would  carry  us  to  a  period  much  beyond  the 
time  when  the  provision  under  consideration  will  become  operative. 

Without  being  able  to  suggest  a  satisfactory  means  of  meeting  the 
difficulties  herein  presented,  i   have   thought  it  proper   that  I  should 
lay  before  you  the  foregoing  statement,  in  order  that  the  wisdom  of 
Congress  may  be  invoked  for  their  solution. 
With  great  respect, 

Your  obedient  servant, 

JOHN  H.  REAGAN, 

Postmaster  General. 

The  President. 


Hollinger  Corp. 
pH8.5 


